In the Matter of the Claim for an Award
A whistleblower received over $28 million—representing a percentage of monetary sanctions—from the SEC for providing original information that triggered investigations into international misconduct by a company, leading to both an SEC enforcement action and a related agency action, despite the misconduct in the related action occurring in regions not initially reported.
The SEC awarded a whistleblower more than $28 million, equal to a percentage of monetary sanctions collected in a covered action and a related agency action, for providing original, voluntary information that prompted investigations into corporate misconduct in a specific country. Although the related enforcement action involved misconduct in geographically distinct regions not included in the whistleblower’s original tip, the SEC determined the information was a catalyst for the broader enforcement effort. The award was finalized after the whistleblower declined to contest the preliminary determination, with the SEC applying Rule 21F-6 factors including the significance of the information, its role in prompting investigations, and the company’s subsequent self-reporting of similar improprieties.
The U.S. Securities and Exchange Commission (SEC) awarded a whistleblower more than $28 million, representing a percentage of monetary sanctions collected in both a covered enforcement action and a related agency action, for providing original, voluntary information that initiated investigations into international corporate misconduct. The whistleblower’s tips directly led the SEC and a related agency to investigate improper conduct in a specific country, which in turn triggered broader enforcement efforts covering additional regions not originally reported. Although the misconduct in the related action occurred in geographical areas outside the scope of the whistleblower’s information, the SEC found the initial tip was a critical catalyst for uncovering the full scope of the violations. The company subsequently self-reported similar improprieties in other regions due to the ongoing investigations, further amplifying the impact of the whistleblower’s contribution. The whistleblower did not participate in or interfere with internal compliance systems, did not delay reporting unreasonably, and declined to contest the preliminary award recommendation. Applying Rule 21F-6, the SEC weighed the significance of the information, its role in advancing law enforcement, and the deterrent effect of the award, concluding the proposed amount was appropriate. The related action qualified under Rule 21F-3(b) and 21F-4(d)(3)(i) as eligible for inclusion in the award calculation because it arose from the same nucleus of operative facts and was based on the whistleblower’s original information provided to the SEC.
Extracted insights
- $28.00M $28 million $10M–$100M
- $1.00M $1 million $1M–$10M
- person claims review staff
- person original information
- person preliminary determination
- person successful enforcement
- Claims Review Staff issued Preliminary Determination
- Preliminary Determination recommending whistleblower award of more than $28 million
- Commission finds administrative proceedings arose out of the same nucleus of operative facts
- Commission adopted recommendation of the CRS
- Claimant provided original information
- information led to successful enforcement
- Commission considered Claimant's information prompted staff to begin investigating
- Commission finds proposed amount is appropriate
UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 91933 / May 19, 2021 WHISTLEBLOWER AWARD PROCEEDING File No. 2021-50 In the Matter of the Claim for an Award in connection with Notice of Covered Action ORDER DETERMINING WHISTLEBLOWER AWARD CLAIM The Claims Review Staff (“CRS”) issued a Preliminary Determination recommending that (“Claimant”) receive a whistleblower award of more than $28 million, equal to percent %) of the monetary sanctions collected in the above-referenced Covered Action (the “Covered Action”) 1 and 1 The Commission finds that the administrative proceedings brought against the individual respondents arose out of the same nucleus of operative facts as the Covered Action under Rule 21F-4(d)(1) under the Securities Exchange Act of 1934 --- page 2 --- (“Other Agency”) (“Related Action”). 2 Claimant provided written notice of Claimant’s decision not to contest the Preliminary Determination. 3 The recommendation of the CRS is adopted. The record demonstrates that Claimant voluntarily provided original information to the Commission and to the Other Agency that led to the successful enforcement of both the Covered Action 4 and the Related Action. Applying the award criteria in Rule 21F-6 of the Securities Exchange Act of 1934 to the specific facts and circumstances here, we find the proposed amount is appropriate. 5 In reaching that determination, we considered that: (1) Claimant’s information prompted staff at the Commission and the Other Agency to begin investigating the Covered Action company’s conduct in a certain country, (2) the record supports that the Covered Action company reported similar improprieties in a different geographical region because of the ongoing Commission and Other Agency investigations, and (3) the Covered Action’s and the Related Action’s charges involved misconduct in geographical regions that were not the subject of the Claimant’s information. Because there is not a strong nexus between the Claimant’s information and the Commission’s and Other Agency’s charges, and the charges were based on information and subsequent investigative efforts of the Commission and Other Agency staff and not assistance provided by Claimant, a percent ( 0%) award (“Exchange Act”), 17 C.F.R. § 240.21F-4(d)(1), and should be treated together as part of the Covered Action for the purpose of making a whistleblower award. 2 The Commission may pay an award based on amounts collected in a related action that is based on the same original information that the whistleblower voluntarily provided to the Commission and that led the Commission to obtain monetary sanctions totaling more than $1 million. Exchange Act Rule 21F-3(b), 17 C.F.R. § 240.21F-3(b). entered into after July 21, 2010, is deemed to be an administrative action that may be a “related action” that is eligible for a whistleblower award. Rule 21F-4(d)(3)(i), 17 C.F.R. § 240.21F-4(d)(3)(i). The Commission finds that the constitutes a “related action” within the meaning of Exchange Act Rules 21F-3(b) and 21F-4(d)(3)(i). 3 See Exchange Act Section 21F(b)(1), 15 U.S.C. §78u-6(b)(1); Exchange Act Rule 21F-3(a), 17 C.F.R. § 240.21F-3(a). 4 See Exchange Act Section 21(b)(1), 15 U.S.C. § 78u-6(b)(1); Exchange Act Rule 21F-(3)(a), 17 C.F.R. § 240.21F-3(a). 5 In assessing the appropriate award amount, Exchange Act Rule 21F-6 provides that the Commission consider: (1) the significance of information provided to the Commission; (2) the assistance provided in the Commission action; (3) law enforcement interest in deterring violations in granting awards; (4) participation in internal compliance systems; (5) culpability; (6) unreasonable reporting delay; and (7) interference with internal compliance and reporting systems. 17 C.F.R. §240.21F-6. 2 --- page 3 --- By the Commission. Vanessa A. Countryman Secretary
UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 91933 / May 19, 2021 WHISTLEBLOWER AWARD PROCEEDING File No. 2021-50 In the Matter of the Claim for an Award in connection with Notice of Covered Action ORDER DETERMINING WHISTLEBLOWER AWARD CLAIM The Claims Review Staff (“CRS”) issued a Preliminary Determination recommending that (“Claimant”) receive a whistleblower award of more than $28 million, equal to percent %) of the monetary sanctions collected in the above-referenced Covered Action (the “Covered Action”) 1 and 1 The Commission finds that the administrative proceedings brought against the individual respondents arose out of the same nucleus of operative facts as the Covered Action under Rule 21F-4(d)(1) under the Securities Exchange Act of 1934 --- page 2 --- (“Other Agency”) (“Related Action”). 2 Claimant provided written notice of Claimant’s decision not to contest the Preliminary Determination. 3 The recommendation of the CRS is adopted. The record demonstrates that Claimant voluntarily provided original information to the Commission and to the Other Agency that led to the successful enforcement of both the Covered Action 4 and the Related Action. Applying the award criteria in Rule 21F-6 of the Securities Exchange Act of 1934 to the specific facts and circumstances here, we find the proposed amount is appropriate. 5 In reaching that determination, we considered that: (1) Claimant’s information prompted staff at the Commission and the Other Agency to begin investigating the Covered Action company’s conduct in a certain country, (2) the record supports that the Covered Action company reported similar improprieties in a different geographical region because of the ongoing Commission and Other Agency investigations, and (3) the Covered Action’s and the Related Action’s charges involved misconduct in geographical regions that were not the subject of the Claimant’s information. Because there is not a strong nexus between the Claimant’s information and the Commission’s and Other Agency’s charges, and the charges were based on information and subsequent investigative efforts of the Commission and Other Agency staff and not assistance provided by Claimant, a percent ( 0%) award (“Exchange Act”), 17 C.F.R. § 240.21F-4(d)(1), and should be treated together as part of the Covered Action for the purpose of making a whistleblower award. 2 The Commission may pay an award based on amounts collected in a related action that is based on the same original information that the whistleblower voluntarily provided to the Commission and that led the Commission to obtain monetary sanctions totaling more than $1 million. Exchange Act Rule 21F-3(b), 17 C.F.R. § 240.21F-3(b). entered into after July 21, 2010, is deemed to be an administrative action that may be a “related action” that is eligible for a whistleblower award. Rule 21F-4(d)(3)(i), 17 C.F.R. § 240.21F-4(d)(3)(i). The Commission finds that the constitutes a “related action” within the meaning of Exchange Act Rules 21F-3(b) and 21F-4(d)(3)(i). 3 See Exchange Act Section 21F(b)(1), 15 U.S.C. §78u-6(b)(1); Exchange Act Rule 21F-3(a), 17 C.F.R. § 240.21F-3(a). 4 See Exchange Act Section 21(b)(1), 15 U.S.C. § 78u-6(b)(1); Exchange Act Rule 21F-(3)(a), 17 C.F.R. § 240.21F-3(a). 5 In assessing the appropriate award amount, Exchange Act Rule 21F-6 provides that the Commission consider: (1) the significance of information provided to the Commission; (2) the assistance provided in the Commission action; (3) law enforcement interest in deterring violations in granting awards; (4) participation in internal compliance systems; (5) culpability; (6) unreasonable reporting delay; and (7) interference with internal compliance and reporting systems. 17 C.F.R. §240.21F-6. 2 --- page 3 --- By the Commission. Vanessa A. Countryman Secretary